Foreign Account Tax Compliance Act (FATCA)
13 February 2015 •
On 30 September 2016 financial institutions in the Crown Dependencies (Jersey, Guernsey and the Isle of Man) and the British Overseas Territories (CDOTs) will automatically exchange information with HMRC in relation to UK residents holding financial assets in these CDOTs for the 2014 and 2015 calendar years.
UK resident non-domiciled individuals (RND) who have claimed the remittance basis of assessment on their tax returns can elect for the Alternative Reporting Regime (ARR) to apply and without this election, HM Revenue and Customs may receive information on these accounts and assets far in excess of what an individual is required to report on a UK tax return.
In order for the ARR to apply the following conditions must be satisfied:
1. Reporting Financial Institution Election
The reporting financial institution must make a one-off election to their local tax authority in order to operate the ARR. The election must be received no later than:
• 30 May 2015 for Crown Dependencies (Jersey, Guernsey and the Isle of Man),
• 30 April 2015 for the British Virgin Islands and the Cayman Islands,
• 30 September 2016 for Bermuda (direct election to HMRC).
2. UK resident, Non-Dom Annual Election
The taxpayer will be required to submit an annual election to qualify for the ARR. The deadline for receipt of the first annual election is dependent on the jurisdiction in which the accounts or assets reside and must be received no later than:
• 30 May 2015 for Crown Dependencies (Jersey, Guernsey and the Isle of Man),
• 30 April 2015 for British Virgin Islands and the Cayman Islands,
• Awaiting official guidance with respect to Bermuda.
3. UK resident, Non-Dom Self-Certification
The taxpayer will also need to file a self-certification no later than 28 February following the relevant tax year. Therefore, in relation to the 2014/15 tax year your self-certification must be received no later than 28 February 2016
The election must include a written and signed confirmation of the following to the reporting offshore financial institution:
• Confirmation that your UK tax return for the relevant year contains a claim or statement that you are not domiciled in the UK,
• Confirmation that your UK tax return for the relevant year includes a claim to be taxed under the remittance basis and the remittance basis charge has been paid if relevant,
• Confirmation that to the best of your knowledge and belief your domicile status and claim to be taxed on the remittance basis is not being formally disputed by HMRC.
4. Deadline for Disclosure
Should your offshore income or capital gains derived from your offshore assets in these territories have either been incorrectly reported or not reported at all, a tax disclosure must be submitted no later than:
• 30 September 2016 for Crown Dependencies (Jersey, Guernsey and the Isle of Man),
• 5 April 2015 for all other jurisdictions.
Moreover, we would strongly advise you to contact your offshore service providers and request details in relation to your offshore interests for the calendar years 2014 and 2015 as soon as possible.
If you have any questions regarding the introduction of the above or wish to speak to Warrener Stewart about your tax affairs in general please do not hesitate to contact us.